Federal suit against disgraced Tundra Village developer...

1of 8The former Tundra Town Home Village project at 18496 Texas 16 on the South Side, now called the Palo Alto Villas, is seen in an aerial image Tuesday, July 10, 2018.Photo: William Luther /San Antonio Express-News

2of 8The former Tundra Town Home Village project at 18496 Texas 16 on the South Side, now called the Palo Alto Villas, is the subject of a civil lawsuit brought by investors.Photo: William Luther /San Antonio Express-News

3of 8Mauro T. Padilla, the disgraced developer who was sent to federal prison for 12 years in 2011 for lying to a bank to secure construction funding on a South Side townhouse project called Tundra Town Home Village, is escorted by security guards into the John H. Wood Jr. U.S. Courthouse. He is being sued by some former investors in his residential development projects.Photo: William Luther /San Antonio Express-News

4of 8Convicted felon Mauro T. Padilla is scheduled to be released from federal prison in September 2021. As part of his sentence, he owes $6.3 million in restitution to his victims.Photo: William Luther /San Antonio Express-News

5of 8Dallas-based developer TVPA Partners has acquired most of the lots from the FDIC and is in the process of repairing the structures in Tundra Village, now called Palo Alto Villas.Photo: William Luther /San Antonio Express-News

6of 8Dallas-based developer TVPA Partners is now is in the process of repairing the structures now called Tundra Village.Photo: William Luther /San Antonio Express-News

7of 8The interior of a home in the Palo Alto Villas development at 18496 Texas 16 on the South Side, is seen Tuesday. Palo Alto Villas is the current name of the former Tundra Town Home Village project.Photo: William Luther /San Antonio Express-News

8of 8The interior of a home in the Palo Alto Villas development at 18496 Texas 16 on the South Side, is seen Tuesday, July 10, 2018. Palo Alto Villas is the current name of the former Tundra Town Home Village project.Photo: William Luther /San Antonio Express-News

More than seven years after Mauro T. Padilla was sentenced to prison for lying to a bank to secure construction financing on a South Side town house project, the disgraced developer was back in San Antonio federal court.

Padilla, 66, went to trial Tuesday in a civil lawsuit brought by 36 investors in his various residential development projects — including the ill-fated Tundra Town Home Village on Texas 16, near the Toyota plant — that he started but never completed. The civil suit, initially filed about nine years ago, accuses him of fraud, violations of the state’s Deceptive Trade Practices Act and breach of contract.

Padilla was sentenced to 12 years after he pleaded guilty to defrauding the bank to get construction draws on a loan and using some of the cash to pay for personal expenses.

The white-haired Padilla is literally defending himself one-handed. Clad in a navy blue prison uniform and orange rubber slip-on shoes, Padilla was shackled when escorted into the courtroom by U.S. marshals. The handcuff on his right arm was unlocked but the left one remained linked to his waist during the court proceedings.

Padilla also is acting as his own legal counsel because he can’t afford an attorney. U.S. District Judge Robert Pitman denied Padilla’s various requests to have a lawyer appointed to assist in his defense. Defendants in civil litigation, unlike in criminal cases, are not entitled to court-appointed counsel, Pitman noted.

Nevertheless, Padilla said he was confident he would show that the allegations against him are untrue. The court would be shown the “light and the truth,” he said.

“I know that I’m a God-fearing man,” he added. “I know God’s on my side in this one.”

Yet Padilla said he couldn’t understand why he’s in court defending himself against claims for as much as $5 million in damages.

“All I have is blood and bones to give now, and I’m not crawling back on that cross anymore,” he told the judge during a rambling 15-minute opening statement in the nonjury trial. “I suspect but I don’t really know what they’re goal is to accomplish, to tear me apart again and tear my family apart again.”

The investor group also sued other parties that have since been dismissed from the case, including the Federal Deposit Insurance Corp., as receiver for the now-defunct First National Bank of Edinburg, various ex-bank officials and American Title Group, formerly LandAmerica Title.

Carlo Garcia, a lawyer for 16 of the investors, said they are proceeding with the case against Padilla to establish a link with the other defendants regarding the various claims. One of the allegations is that Padilla conspired with the bank and title company to defraud investors.

Following a verdict in the trial, the plaintiffs intend to file an appeal and seek a court ruling allowing them to proceed with claims against the other defendants.

On Monday, the plaintiffs sought an entry of default against Padilla’s companies and his son, Mauro Joe Padilla. No one was there to represent them in court Tuesday.

During his opening statement, Garcia said Padilla used investors’ payments in the various projects for personal use and to enjoy a “lavish lifestyle” at their expense.

The horror story that was Padilla’s fraud “led to divorces and bankruptcies” for some investors, Garcia said. “Our clients are devastated by this, some more so than others — more so than Mr. Padilla.”

The opening of the trial got off to a sluggish start. When lawyers for the investors presented Padilla a box of court exhibits they intend to use, the judge granted Padilla time to review them

But with Padilla still slogging through the documents about 90 minutes later, the judge told him that the morning of a trial is not the time to be reviewing court exhibits.

“It seems to me that you’ve done nothing to prepare for this case until this morning,” Pitman said. “Unfortunately, it’s too late now to do that kind of preparation.”

Kristopher Hochart, a Helotes real estate agent who hoped to manage Padilla’s development projects, was the first witness to take the stand. During cross-examination, Hochart testified how he had a terrible experience with another developer. Padilla wanted to know of the two developers, which was the worst. Hochart said Padilla, saying a building he and a partner invested in was never finished.

“I don’t have a completed building and I lost $750,000,” Hochart said. “I hope that answers your question.”

Garcia asked Hochart to describe Tundra Village, the South Side development that Padilla built without an approved plat or a master plan for the development. No roads, electricity or sewer lines were ever installed, either. Some of the buildings were even built in a floodplain.

“Tundra looks like a movie set for a zombie apocalypse,” Hochart answered. “It’s just these buildings in the middle of a field.”

Dallas-based developer TVPA Partners is now trying to succeed where Padilla failed. TVPA acquired most of the lots from the FDIC and is in the process of repairing the structures in Tundra Village, now called Palo Alto Villas. There will be a total of 36 four-plexes, said Craig Glendenning, TVPA’s project manager. He hopes to have the first 15 done within a year.

The plan is to rent the units and then sell them to investors. The three-bedroom, two-bathroom units start at $170,000. The three- and four-bedroom units with 2½ baths start at $210,000. A couple of sales are pending yet.

“We have a a lot of interest,” Glendenning said.

Renee Green, director of Public Works for Bexar County, however, said the development is still saddled with issues that existed when Padilla was building it. She cited the floodplain and no plan for dealing with wastewater.

TVPA is working on getting the issues resolved, Glendenning said.

The trial is scheduled to continue through the end of the week. Padilla is slated to be released from prison in September 2021. As part of his sentence, he was ordered to pay his victims $6.3 million in restitution and serve five years of supervised release.